state taxes for a non resident

[cholt55]

I did my non resident state taxes first (MN).  Besides pulling in my W-2 it also included all my investment income from my federal.  I put in 0 for the portion that should be considered MN tax in all the boxes but it appears it ignored that and still included all the investment income, dividends, etc.  In last years return it didn't do this so there wasn't an issue.  The return was marked non resident so why is it pulling in income it shouldn't?

[LenaH]

If you are still getting an error, it would be helpful to have a TurboTax ".tax2021" file that is experiencing this issue.

You can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions: Go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is. Click okay through this screen and then you will get a Token number. 
5. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

[cholt55]

the token is 973660

[LenaH]

Although it may look like Minnesota is taxing your entire income, it actually uses an allocation method to determine your tax. As in some states, their state return starts with all your taxable income and taxes it at the applicable Minnesota rate based on your total income. Then, the state uses your Minnesota sourced income and taxes it at the applicable Minnesota rate based on your total income. As you can see below, on Schedule M1NR, it is dividing your allocated income by your total income to come up with an allocation percentage of 75.834%. Then, it takes the tax calculated from Line 12 of Form M1 and multiples it by 75.834% to come to your tax liability of $28,636. 

On Form M1, you will see on Line 13, it is allocating your income correctly and only using the allocated tax as calculated on Schedule M1NR. 

@cholt55

[cholt55]

Thanks for the clarification, appreciate your help.